By unveiling its new “economic vision” (A Quebec that wins), the Government of Quebec has notably confirmed the increase in its efforts to support local manufacturing and agrifood production, namely the relocation to Quebec of productive activities relocated or subcontracted abroad, as well as the substitution of imports from inputs or finished products by local manufacturing and sourcing. It announces, for example, a new “government strategy for public procurement” aimed at promoting and prioritizing Quebec producers and suppliers.
Other initiatives in this direction had already been implemented, in particular on the side of Investissement Québec, which recently created a “Quebec purchasing and economic development” vice-presidency dedicated to local procurement and relocations. . The Ministry of Economy and Innovation must also soon publish an action plan in these matters, which should, as indicated A Quebec that wins, prioritize the agrifood, health and pharmaceutical products, industrial machinery, wood products, energy and transport sectors.
In a context of severe labor shortage, however, many see this strategy as an aberration, or even a deleterious form of interventionism or protectionism. However, far from constituting a nationalist whim, this industrial repositioning is in fact an absolute necessity, for at least three main reasons.
Important challenges
In terms of international political economy, first of all, all the Western powers are working on it: the Industrial Strategy for Europe and the Green Pact, on the side of the European Union, the German policy Made in Germany 2030 , the Build Back Better plans of the United Kingdom and the United States (in addition to the Buy American Act in the latter case), the France Relance and France 2030 initiatives, then even the report of the Council on Canada’s industrial strategy, published in 2020, confirm a tectonic movement in this direction.
In terms of trade and productive autonomy, then, manufacturing Quebec faces significant challenges: the Quebec manufacturing sector has been generating trade deficits for more than a decade, particularly in the medium-high and high-rise sectors. high-tech. In addition, less than 10% of companies in the sector that operate in Quebec are foreign-owned (this percentage reaches more than 30% in the aerospace industry and more than 45% in the pharmaceutical industry), but these foreign companies alone account for over 40% of manufacturing GDP, as well as over 50% of exports and around 30% of total manufacturing imports.
In addition, if local Quebec manufacturing meets about 55% of Quebec’s total domestic demand for inputs and manufactured products, we are therefore dependent on imports of inputs or finished products up to 45% for the sector. manufacturer as a whole, but more than 50% in the food manufacturing niche, almost 90% in the transport equipment sector, more than 90% in the pharmaceutical sector, and around 70% for medical supplies and equipment, for example.
Finally, from an environmental standpoint, it should be noted that two-thirds of Quebec’s overall trade deficit is attributable to the import of fossil fuels largely intended to supply the transport industry (including goods). Our industries, which consume the most energy, emit the most GHGs and have a high electrification or decarbonization potential (food, transport equipment, chemicals and pharmaceuticals, metallurgy) are also among the most dependent on imports with a high carbon content. often very high (think foods from Asia or Latin America, cars from Mexico, natural gas from the United States, Chinese and Indian pharmaceutical inputs, or primary metals from Brazil, China and Congo) .
For these reasons in particular, as for many others, the Government of Quebec therefore has a clear duty to promote local procurement, manufacturing and purchasing. Its approach, focused on preferential access to public markets, but also on industrial innovation and automation, consultation and networking between suppliers and producers as well as the development of strategic sectors of heavy electric vehicles, hydrogen and biofuels, appears promising to us. Our research on these questions at IREC clearly shows that Quebec manufacturing companies are ready to follow it on this path if we give them the means to do so. So let’s give it to them.